DCM – Brief – [NONRATED] – 1Q26: Robust ASPs growth boosted earning

1Q26: ASPs growth pushed by the Middle East conflict

DCM reported 1Q26 revenue of VND5,286bn (+55% yoy, ~101% of KIS forecast), driven by (1) 38% growth in sales volume and (2) 12% increase in ASPs, supported by the Middle East conflict. Gross profit surged 52% yoy to VND1,346bn (~78% of KIS forecast). Specifically:

• Urea: volume increased 10% yoy to 272kt, mainly driven by exports (+13.1% yoy). ASPs calculated from DCM’s disclosed figures increased less than expected (+9% yoy, -6% qoq), compared to global urea prices: +30% yoy, +27% qoq; DCM’s announced retail prices: +19% yoy, +7.6% qoq; and our forecast: +31% yoy, +13% qoq. Gross profit accordingly reached VND1,212bn (+38% yoy, +5% qoq).
• NPK: volume reached 34kt (+48% yoy, -61% qoq). Revenue and gross profit increased 56% and 68% yoy, respectively, to VND815bn and VND95bn.
• Trading fertilizers: volume surged to 114kt (+231% yoy, +57% qoq). Gross profit reached VND65bn (+81% yoy), implying a gross margin of 4.4%.

1Q26 NPAT accordingly jumped to VND789bn (+91% yoy, ~85% of KIS forecast).

We observe that DCM is being cautious in recognizing profits from the Urea segment, as the ASPs implied by reported figures have yet to fully reflect the sharp increase in urea prices recently.

2Q26: double- to tripple-digit NPAT growth to persist

We believe NPAT could continue posting strong double- to triple-digit growth in 2Q26, supported by (1) elevated urea and fertilizer price levels amid Gulf conflict-driven supply disruptions, and (2) favorable weather conditions supporting domestic demand, as the rainy season arrives earlier and with higher rainfall than initial forecasts that had anticipated an El Niño phase.